Consolidated Profit And Loss Account (Page 11 of 48) in pdf

NOTES TO THE ACCOUNTS

A reversal of impairment losses is limited to the asset’s carrying amount that would have been

determined had no impairment loss been recognised in prior years. Reversals of impairment losses

are credited to the profit and loss account in the period in which the reversals are recognised.

Investments in securities

(i)

Held-to-maturity securities are stated in the balance sheet at amortised cost less any provisions for

diminution in value.

The carrying amounts of held-to-maturity securities are reviewed as at the balance sheet date in

order to assess the credit risk and whether the carrying amounts are expected to be recovered.

Provisions are made when carrying amounts are not expected to be recovered and are recognised

as an expense in the profit and loss account for each security individually.

(ii)

Non-trading securities are classified as long-term investments and stated in the balance sheet at fair

value. Changes in fair value are recognised in the investment revaluation reserves until the security

is sold, collected or otherwise disposed of or until there is objective evidence that the security is

impaired, at which time the relevant cumulative surplus or deficit is transferred from the investment

revaluation reserves to the profit and loss account.

Transfers from the investment revaluation reserves to the profit and loss account as a result of

impairments are reversed when the circumstances and events that led to the impairment cease to

exist and there is persuasive evidence that the new circumstances and events will persist for the

foreseeable future.

Profits or losses on disposal of non-trading securities are determined as the difference between the

net disposal proceeds and the carrying amount of the securities and are recognised in the profit

and loss account as they arise. On disposal of non-trading securities, the relevant revaluation

surplus or deficit previously taken to the investment revaluation reserves is also transferred to the

profit and loss account for the year.

(iii)

Trading securities are classified as short-term investment under current assets and stated in the

balance sheet at fair value. Changes in fair value are recognised in the profit and loss account as

they arise.

Cash and cash equivalent

The Group defines cash and cash equivalents as cash at bank and on hand, demand deposits with banks

and other financial institutions, and short-term, highly liquid investments that are readily convertible into

known amounts of cash and which are subject to an insignificant risk of changes in value, which were

within three months of maturity at acquisition. Bank overdrafts that are repayable on demand and form

an integral part of the Group’s cash management are also included as a component of cash and cash

equivalents for the purpose of the consolidated cash flow statement.

Wheelock and Company Limited Annual Report 2004/05

Consolidated Profit And Loss Account Page 11